The biggest story for the session was the outcome of the OPEC gathering in Algiers, as market watchers heard of an agreement among the energy ministers.

Major Events:

OPEC meeting deal – Crude oil staged a strong rally when OPEC leaders announced that they finally reached an agreement… on an OUTLINE for an output deal. Yep, I know it’s a bit anti-climactic but it’s the farthest that these energy ministers have come in terms of making a coordinated effort to stabilize the oil market.

In fact, this marks the first time in eight long years that these top oil-producing nations have all agreed that they need to cut production. As it turns out, this agreement was made possible because Saudi Arabia conceded that Iran can be exempted from this output deal.

However, they still need to debate on the size of the output cut and how this will be achieved, something that they might put off until their next official meeting in November 30. Now that’s a long way off so analysts are thinking that these nations might use the next couple of months to ramp up production.

U.S. durable goods orders – The only reports printed from the U.S. were the durable goods orders figures, which printed slightly better than expected results for August. The headline figure came in flat instead of falling by 1.0% while the core reading showed a 0.4% dip versus the projected 0.5% drop.

On a less upbeat note, the July figures suffered significant downgrades. The headline reading was lowered to show a 3.6% gain from the previously reported 4.4% increase while the core figure was revised from 1.5% to 1.3%.

Fed head Yellen’s testimony – According to the Fed head honcho, majority of FOMC committee members foresee an interest rate hike this year, reinforcing expectations that the U.S. central bank would likely tighten either in November or December. While she noted that job creation is proceeding at a sustainable pace, she expressed some concern about inflation by saying that they’re not seeing enough upward pressure on price levels.

Major Market Movers:

CAD – The Canadian dollar was the big winner for the day, boosted by the sharp rally in crude oil after the OPEC gathering.

USD/CAD fell from a high of 1.3270 to a low of 1.3077 (-1.45%), CAD/JPY popped up from 75.86 to 77.33 (+1.93%), EUR/CAD tumbled from 1.4850 to a low of 1.4669 (-1.22%), and GBP/CAD slipped from 1.7234 to 1.7024 (-1.21%).

Every day, I will present to you my findings and daily commentaries on what recently happened in the economic arena, possible shifts in sentiment, economic events to watch out for, and their effects on currencies.

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